Thursday, April 19, 2012

Must-Have Insurance for Lecherous Employers

Ex-Desperate Housewifes star, Nicole Sheridan, sued ABC for $6 million in damages for wrongful termination. This case has been going on for years and the restart button was hit again when her lawsuit recently ended in a mistrial. Her case will probably be retried, costing ABC far more in the end than $6 million. Whatever the outcome, nobody will win except the attorneys.

Your pockets may not be as deep as ABC’s, but you can make sure you will be able to afford the best legal protection against disgruntled employees with supplemental EPLI coverage. If you are a business owner; you need to know that your normal business property and liability policy does NOT cover employment practices liability (EPLI).

In fact, EPLI is a supplemental policy that only 25% of employers are smart enough to have. Allied Broker’s largest uncovered claim since 1954 was a client who did not follow our recommendation to buy this essential and affordable protection. One of the company’s managers was accused of sexual harassment by another employee. $700,000 in damages later, not including attorney’s fees, the executive who failed to take our advice was collecting unemployment- and probably plotting his own wrongful termination suit.

California is a pro-employee state. To sue an employer, employees needn’t even hire an attorney. All they have to do is file a claim with the state’s EEOP Department and the agency will defend them for nothing. You the business owner, on the other hand, must hire an attorney and even if you win, you will still be out $5,000-10,000 minimum- with no recourse to recover your costs.

The EEOP Department justifies its existence by dragging you and your attorney through the wringer. Employers are considered guilty until proven innocent. If the EEOP finds any reason to pursue the case against you, they will take you to the woodshed on the taxpayer’s dime, at no cost to the employee. If the EEOP lets you go, the employee is still free to hire an attorney to pursue a civil case against you. Then the fun really begins- “heads” the employee wins, “tails” you lose.

EPLI insurance is very reasonable. A $1 million liability policy that includes legal defense starts at under $2000 per year- a lot cheaper than losing your business to some made up (or real) claim by an ex-employee. You might be someone who would never intentionally do anything wrong, or you might be an unrepentant, backside-grabbing lech; either way you need to get EPLI coverage to protect your business. Call Allied Brokers today to learn more.

Visit our website at http://www.alliedbrokers.com/ for information about all the types of insurance we offer. Or call 1-888-505-7988 for a free rate quote.

Friday, April 13, 2012

Where Are Homeowner and Auto Rates Going? Up!

Believe it or not, insurance rates had been decreasing for the last 8 years.Unfortunately, in 2012 they will start going up again- 5% to 30% per year until we reach 2003 rates. The favorable conditions that in the past allowed insurance companies to lower their rates and attract more customers have vanished. Insurance will be harder to get and more expensive for the next few years.

2011 was a tough year for everyone and the insurance industry was no exception. 2011 third quarter insurance industry profit declined 92%. The biggest hits came from record catastrophe claims and the crash in the real estate market. Because insurers invest heavily in real estate, the value of their investments plummeted and their need for additional capital to meet the insurance risk reserves required by law increased.

The California Insurance Department has approved rate increases for insurers. Financially strapped insurance companies have few options and none of them benefit the consumer. Insurers can go out of business, stop writing new policies, stiffen eligibility qualifications or raise the rates of current customers.

If your insurance provider raises your rates, call us at Allied Brokers immediately. As a broker, our agents can shop numerous providers to find you a lower rate. Since not all companies will raise their rates immediately, we can save you money and buy you time by switching you to a different provider.

Visit our website at http://www.alliedbrokers.com/ for information about all the types of insurance we offer. Or call 1-888-505-7988 for a free rate quote.

Thursday, April 12, 2012

Blue Shield’s Bag of Tricks

Health insurance is a crazy game that few people really understand. Just when you think you have it figured out, they change the rules. Health insurance companies like Blue Shield have two main problems:

- Rapidly increasing cost of benefits by the medical industry makes it hard to keep the premium rates current with the increasing cost of medical claims.

- As their insured’s age, their claims surpass the premiums charged.

To solve these two problems, Blue Shield resorts to these solutions:

Negotiate aggressively:

Every two years, contracts are renegotiated with the health care providers as to the maximum they can be reimbursed for each medical procedure.

For example, my original bill for a kidney stone surgery was $42,000. After Blue Shield applied their contractually agreed discounts, my bill was cut to only $5,000.

Raise rates:

Even though insurance companies fight hard to contain costs, it’s a losing battle. They eventually must raise the premium rates of each plan when it becomes unprofitable.

New products:

Every 6-12 months, insurance companies change the plans available with new benefits, deductible options and rates to new applicants that they think will make them a profit.

Close old plans when they become unprofitable:

- When you first start your policy you will be in the peak of good health so you will get the most current plan that has been designed by Blue Shield to make a profit. You will be grouped together with others in good health to form what is called a “pool” of insured’s.

- As your pool ages, the claims experience will increase and the profitability will diminish to the point of unprofitability for the entire pool.

- At this point, the rates for the entire pool will be increased.

- At this point, Blue Shield may establish lower rates within the same pool for those who are in better health. This is called “tier rating” and it is normally in five different levels.

- When rates start to increase, the members who are still in good health will begin to leave the pool for other health insurance solutions.

- This exodus of the good risks from the pool accentuates the loss experience and the unprofitability of the pool. Thus the rates begin to accelerate rapidly.

When this happens to your pool, there are things you can do to avoid paying the increased rates. If you are in good health, you can apply for one of the new plans that have lower rates. Or you can apply for a change to a lower tier premium rate for your present plan. Another option is to change your deductible and/or drop some of the coverage. I saved $4,800 per year by dropping some coverage and raising my deductible from $750 to $2,000

If you are in poor health, you can apply for a change to a lower tier rate level premium for your present plan. Remember- you have nothing to lose by trying and as your health improves, you may be accepted into a lower tier level. Call us- this service is free.

If you do not re-apply to prove you are healthy enough to change tiers, you are stuck. Most people do not know they can transfer to get a better deal. Allied Brokers can do this for you at NO cost! Don’t give up hope- call us! We are here to help you balance cost and value within this tumultuous health insurance marketplace.

Visit our website at http://www.alliedbrokers.com/ for information about all the types of insurance we offer. Or call 1-888-505-7988 for a free rate quote.

Tuesday, April 10, 2012

Renting a Car? Should I Buy Rental Car Insurance?

Rental car company insurance feels like a shake-down. You think your auto policy covers it, but you’ve never read the fine print so you buy it anyway and drive away feeling like you’ve wasted money. Have you? Here’s what you need to know:


Domestic car rental: Rental car company coverage usually only covers damage to THEIR rental car and THEIR lost revenue while it is being repaired. Your personal auto insurance policy usually covers damage to a rental car and your liability for the other car or person you hit, when you drive in the US and Canada. You may have to pay the deductible for collision on your policy and the loss of rents during the repair. In most cases, these costs are covered by your credit card. [See below] Inside the USA, buying the rental car company coverage is usually a waste of money, as it is duplicate coverage.

Foreign car rental: If you rent a car in a foreign country, your US policy will NOT cover you for:

- Liability
- Comprehensive and collision
- Medical
- UM

A client once emailed me from London to tell me that he had crashed his rental car. He hadn’t purchased insurance from the rental car company and wanted to know if he was covered by his US auto policy for collision coverage. He was NOT.

There are only a few companies that offer a worldwide coverage option. Whereas this type of coverage may be right for the international business traveler, it’s expensive for those of us who seldom take a vacation abroad. For the infrequent foreign traveler, we recommend you buy complete insurance from the car rental company you use and make sure it covers any and all drivers.

Credit Cards: Most credit card companies provide domestic and worldwide coverage for damage to rental cars- IF YOU USE THEIR CARD TO PAY FOR THE RENTAL CAR. Luckily for my client in London, he had paid for his rental with his American Express card and they paid for the majority of the claim.

Credit card coverage has many restrictions, so READ THE FINE PRINT:

- Many countries are excluded, i.e.: My client was covered in England but not Ireland.
- If you get a DUI, your insurance may be invalidated.
- There are usually many restrictions regarding accidents.
- Platinum is important; the better the card, the better the coverage.
- Credit card coverage usually excludes liability for injury to the other driver and damage to his car.

Before you plan a trip, call Allied Brokers. We can review your auto policy, answer your questions and make sure you are covered. We are here to help you solve all your insurance problems!

Tuesday, April 3, 2012

Squatters, Vandals and Thieves

How would you like to come home from 6 months in Baja to find your living room turned into a homeless encampment, your kitchen into a meth lab and your bedroom into a kennel? Worst case scenario? No. The really bad news is that you’re your insurance won’t cover it.

Most homeowner’s policies have a 30 day limit on vacant or unoccupied properties. When your house is vacant- meaning all furnishings have been removed- you usually lose coverage for vandalism, malicious mischief and water damage.

If your house is vacant pending sale, vacant under-construction or simply unoccupied, most insurance companies will cancel your policy and/or deny your claim. Look for the “vacancy clause” in the fine print. Since the definition of “vacancy” can vary from policy to policy, find out what your carrier’s conditions are for paying claims before you go anywhere.

Most companies do not offer policies for vacant, unoccupied or under-construction homes. We do, and we provide different term lengths- from a few months to a year- depending on your needs. Allied Brokers can solve all of your insurance problems- call us today!

Visit our website at http://www.alliedbrokers.com/ for information about all the types of insurance we
offer. Or call 1-888-505-7988 for a free rate quote.